When home and cabin owners make the decision to sell, the first thing they want to know, of course, is what the correct sales price for their property should be. Working every day with the market, I watch what’s happening with sales prices and I keep up with the trends of what’s happening. Right now, we are in a sellers’ market due to the low number of properties for sale, so the demand for homes and cabins is continually driving up the sales price.
Before most clients contact me, however, they’ve already turned to the internet for their research into setting the correct sales price. Real estate marketing websites use computer generated figures based on a total sum of properties without any input from a human. So they don’t take into account all the little things that appraisers are going to care about when they come out to see if the lender should finance the purchase. As a result, the internet estimates are generally incorrect. Sometimes, they are too high. Other times they are too low. For cabins, this number is derived by including all the very expensive log cabin construction in our county – lumping every kind of construction together. To the computer there is only one category and it is called “residential,” whether it is overnight rental cabins or true residential like your house. Clients who list with me will ask if the estimated sales price will hurt the sale of the home if it doesn’t match what we have priced it at based on market comparisons that are more “apples to apples.”
Well, here’s the good news, sellers: the online sales price estimate isn’t going to hurt us.
As a matter of fact, we’re going to use it as a marketing tool! We have estimates like this all the time and we make them work in our favor – even though you and I know that the estimate is not accurate (and actually buyers and buyers agents do as well).
In the Great Smoky Mountains Association of Realtors Multiple Listing Service, there is no division for the type of properties we have in Sevier County. If it has bedrooms, it’s a residence – even if it is a 12-bedroom log lodge bringing in an income of $300,000 a year.
The sold numbers that throw this off are our new construction log home cabins which run $170-$280 a square foot. (True residential properties are still running right at $100 a square foot to build.) When the computer picks up these log cabin numbers it just creates estimates that are well, not accurate. It doesn’t fit the programming pattern, so it messes it up. Some computer programs also don’t seem to be able to keep up with the pace of the market, which can be a problem for someone who is selling their house based on today’s sales prices and not on a price from 90 to 120 days ago.